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Applecross Dental Services is investigating expanding its operations by acquiring additional teeth cleaning equipment. The equipment would cost $140,000 and management has estimated that it
Applecross Dental Services is investigating expanding its operations by acquiring additional teeth cleaning equipment. The equipment would cost $140,000 and management has estimated that it would result in net cash inflows of $14,900 per year. The equipment would have a 15-year useful life with an expected salvage value of $14,700. (Ignore income taxes.) Required: 1. Compute the equipment's IRR. (Hint: Use Microsoft Excel to calculate the discount factor(s).) (Do not round intermediate calculations and round your final answer to 1 decimal place.) Internal rate of return % 2-a. Assume that instead of $14,900, the salvage value in 15 years for the new equipment will be $0. Compute the IRR under this new assumption. (Do not round intermediate calculations and round your final answer to 1 decimal place.) Internal rate of return %
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